Agile Expense Management Tools for Growing SMEs

Small and midsize enterprises, like their large-enterprise counterparts, need tools that will simplify their expense reporting process and reduce the manual labor for both employees and administrators. The difference is they don't necessarily have the budget. "We're a start-up. We don't have $10,000 to put towards expense management," said David Wieseneck, vice president of finance for online classified advertising/reselling platform Letgo.

SMEs also need agile and consumer-grade solutions that are easy to use, implement and configure as the company grows. "While small businesses may be small today, they're certainly growing and will be the midsize and larger businesses of tomorrow. It's important for them to have an expense solution that will scale and grow with them," said Chrome River chief marketing officer Julie Roy.

Construction company Paric had 30 corporate cardholders and operated in four states. However, over the past five to seven years, it has expanded to 16 states, and the number of cardholders has increased to 90.

Meanwhile, travelers were submitting Excel spreadsheets and taping receipts to the reports. Some travelers without corporate cards were spending as much as $3,000 on their personal cards, and reimbursement took a month and a half. "That's not good business practice," especially when travelers have put their own money on the table, said Paric assistant corporate controller Alicia Buehne.

Not to mention that reconciling spend and reimbursement was tedious and time consuming, especially because the payroll department handled reimbursement. Beuhne and her team had to sort through a lot of paper trails. "We wouldn't even know where to start to look," she said. They'd pull up an employee's payroll record to identify payouts to that employee, then match the amounts to the invoices and receipts the traveler had submitted.

Agility

Before joining Letgo, Wieseneck had worked for another online classified start-up, which used Excel spreadsheets. Reimbursement took three months, he said. So when it came time to launch Letgo 20 months ago, "we decided that's not how we wanted to kick-start a new company."

Shortly before leaving his previous company, Wieseneck had implemented Expensify, and he did so at Letgo from the get-go. The company has expanded rapidly to 150 employees in Asia, Europe, South America and the United States, and it has headquarters in Barcelona and New York. About 20 employees are frequent travelers, and another 20 travel as much as twice a year, spending a total of $200,000 a year on travel.

The agility of the Expensify platform benefits three types of Letgo employees: end users, administrators and finance executives. Users find the tool "super easy, low touch and end to end," Wieseneck said. Its SmartScan technology parses receipts, and the platform automates expense reports for users. He's never had to train anyone on the system and has fielded only one question. "We use Instagram and Snapchat, and we want to use tools [for work] that feel like we would use at home," he said.

Machine learning is a big boon for his users. The more receipts that go through that functionality, the better Expensify becomes at coding receipts without human intervention, Wieseneck explained. Previously, Letgo users might have classified most receipts manually and the company's expense tool would get two right. Now, Expensify gets most right.

Quick reimbursement, meanwhile, allows the finance department to gain goodwill with employees. "That helps us win that seat at the table with the rest of the company and be respected," Wieseneck said.

Administratively, Wieseneck appreciates the ability to add or terminate users easily, and he gains from an expense tool that integrates with Letgo's accounting software, Xero. "We've been able to scale from 10 to 150 [employees] on the platform easily. It's no more work for the accounting team to administer expense reporting and pay people back," he said.

Financially, Letgo can onboard all employees onto the platform but pay only for the reports processed. This means a company that's scaling does not have to project usage costs for the following years. Meanwhile, a tool that's easy to use motivates travelers to submit expenses more frequently, thereby enabling Letgo to see spend closer to when it happens.

Paric rolled out the Certify expense management tool in February and reported similar ease of use and time-saving advantages. The ability to customize with different cost codes for specific projects made tracking spend more sophisticated.

Buehne also found that use of a third-party tool gives Paric an extra set of hands for managing travelers, a big impact for a small firm. "We're jumping from the 1980s to the 21st century," she said.

Speak Up

When deciding on an automated expense system, Buehne said it's important to understand the magnitude of the implementation and "really nail down ahead of time that you will have a partner to assist you in that implementation." Certify's customer service reviews formed one of the reasons Paric went with that provider. She knew she was going to need some hand-holding through the implementation process, and she wasn't sure she'd get that from another vendor Paric was considering.

"They didn't seem like a partner," Buehne said of the other vendor's pitch. "We were going to be an itty-bitty baby fish in the big pool of [its customers]."

She also advises SMEs to define their expectations to the supplier early on and not be afraid to ask questions.

Chrome River's Roy said companies should think about the kind of data integrations and capabilities they need—i.e., different types of credit card feeds, multiple booking tools, value-added-tax recovery—because the more data a company integrates, the more complex the solution it will need. "A lot of smaller companies have those requirements or think they may have them down the road in a short time frame," Roy said. "These are cool things that a lot of bigger mid- to larger size companies definitely want, but if it's not something they need right away, they can turn them off."